Coupons and coupons to build customer loyalty

• With the crisis and the decline in consumption, the role the Web can play in lifting economies, reaching new markets, and creating business is crucial.

A Nielsen insight from October 2013, puts this very fact under the lens. How on the one hand many companies are trying to figure out how they can turn the crisis into an opportunity, and on the other hand how the consumer crisis is reaching unimaginable levels.

How household consumption is changing according to Nielsen

Household consumption is suffering from the prolonged loss of purchasing power and the now low levels of consumer confidence. The trend of FMCG (fast-moving consumer goods) is continuously affected by the macro-economic dynamics affecting Italy.
The presence/absence of children is the variable that most discriminates level and trend of food expenditure. Childless households are concentrated in the middle/high-spending segments with stable and positive trends.
In contrast, families with children are clearly more exposed to the crisis. They are characterized by low levels of spending (low-income families in Area 4) and strongly negative trends (families with young children even with middle/high incomes).

From a study conducted in the Analytic Consulting area, which is based on the analysis of individual Food & Beverage categories over the past few years, an important finding emerges regarding the two main Marketing levers: Price and Promotions.
The main evidence is the growing trend regarding a general increase in shelf price elasticity for all categories. With the exclusion of light and wellness products, which are trending against the trend.
This means that the consumer is increasingly price-conscious and mindful of his or her shopping cart, but prioritizes self-care and attention to the children in the family.
In addition, as sales decline for most categories, there is an increasing effectiveness of price cutting. Consumers put off buying certain products until they find them on promotion to safeguard their spending budget.

How can industry and distribution respond

Consumers have become accustomed to seeing products on promotion. What needs to be carefully studied is the right balance between shelf price (proper use ofprice elasticity, in difficult times, can play a very important role in sustaining volumes) and frequency/duration/intensity of promotions.

The importance of coupons

We need to play on the lever of innovation, with promotions that aim to safeguard the consumer’s wallet.
For example, offering coupons that can be used in subsequent spending, so as to recreate loyalty to the store and the sign.
Making promotions strategic elements for industry and distribution. No longer just tactical levers to correct the short-term sales trend.

Source: Nielsen article

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